How to adjust net income to calculate net cash flows


Assume the indirect method is used to compute net cash flows from operating activities. For this item extracted from the financial statements-Decrease in Accounts Receivable-indicate the effect on net income in arriving at net cash flows from operating activities by choosing one of the following:
   a.   Not used to adjust net income to calculate net cash flows from operating activities.
   b.   Subtract from net income to arrive at net cash flows from operating activities.
   c.   Add to net income to arrive at net cash flows from operating activities.

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Accounting Basics: How to adjust net income to calculate net cash flows
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